What is a payment gateway and how does it work?
A payment gateway (also known as a payment processor) is a third party provider that processes online payments, allowing eCommerce stores to offer multiple payment methods. It enables users to make purchases easily and securely.
Many types of payment gateways can benefit your business, depending on your industry and what you want to sell online. If you’re an entrepreneur looking to sell online, it’s essential to research the different types of payment gateways to find the one that best suits your needs.
Some gateways may be less well-known, while others are favorites among entrepreneurs seeking online success.
How Does a Payment Gateway Work?
Most payment gateways operate in a similar way: once you visit a website to make a purchase, the gateway receives your order. You enter your name, address, and banking details (usually only required the first time you use that specific processor, as creating an account on their platform is necessary), then click the purchase button.
As an entrepreneur, this can greatly simplify your operations.
Online shopping has surged to unprecedented levels due to the ongoing pandemic. However, many users still perceive online shopping as somewhat risky. Alongside the increase in online purchases, there has also been a rise in fraud and identity theft attempts.
For this reason, people who choose to shop online may feel that their personal and financial data is safer when using a payment gateway. Offering this payment option in your online store can be a significant advantage for your business.
Types of Payment Gateways That Can Benefit You
Gateways for Credit Card Payments
These are the most common payment methods. Companies like Stripe provide an easy way to accept credit card payments, including cards from outside Mexico.
Gateways for Bank Transfers
These gateways offer the best rates and do not charge commissions, making them an attractive option for those who prefer direct bank transactions.
Gateways That Use a Code for In-Store Payments
Some gateways, like Mercado Pago, offer the option to generate a code for payments in physical stores that are partnered with the gateway.
This means if you’re an entrepreneur with both an online and a physical store, you don’t have to worry about paying double commissions or missing out on deposits from your online sales.
Free Payment Gateways
If you’re starting a business and want to increase your online store’s visibility, you might consider using a free payment gateway.
Free gateways typically handle a lower transaction volume, but many new online businesses see them as a good starting point.
While they may not be the best long-term solution, they can be beneficial while your online store gains traction. Once your business becomes more successful, you might want to switch to a more secure, albeit more expensive, option.
There are many types of payment gateways available to help your business succeed in online sales. These are some of the most common, each offering unique benefits that can be highly useful depending on the type of product you sell.
Most Recommended Payment Gateways
There are many excellent payment gateways offering great service and unique benefits. Here’s a list of the most commonly used in Mexico:
PayPal
Conekta
PayU
OpenPay
Mercado Pago
Adyen
PayPal
One of the most popular gateways in Mexico, though it doesn’t offer the best rates or lowest fees. Its main advantage lies in its extensive experience in payment processing and its large user base, which can help boost sales for your business.
Conekta
Conekta allows you to offer a card to your users that can be used at any store accepting credit cards. Additionally, it provides insurance to protect you in case of any issues, adding an extra layer of security.
PayU
This platform supports a wide variety of payment methods and offers a mobile service for collecting payments via your phone.
It also has a mobile app that allows you to better manage and monitor your transactions in real time.
OpenPay
OpenPay enables customers to make online purchases using debit cards. It has gained significant traction in Mexico’s major states in recent years, reflecting its growing acceptance and reliability in secure transactions.
Mercado Pago
With the broadest coverage in Mexico, Mercado Pago is part of Mercado Libre, a leader in eCommerce across Latin America.
It supports both in-store (for affiliated stores) and online payments, and offers features like customizable commission rates and interest-free installment plans.
Adyen
Adyen supports online payments on any device or channel, regardless of your business model. It’s quick to set up and allows you to add new payment methods easily to boost sales. If you’re looking to expand internationally, Adyen is a great choice due to its global acquiring network, enabling acceptance of international payments.
What Are the Advantages of Using a Payment Gateway?
Using a payment gateway in your online store offers several benefits, including the assurance that you can sell your products seamlessly. It simplifies the purchasing process for customers, allowing them to complete transactions with just a few clicks, while giving you confidence that the payments you receive are secure.
Recommendations for Choosing a Payment Gateway
When selecting a payment gateway, consider the following recommendations:
Offers a variety of payment methods
Reliable and easy to use
Provides insurance to protect against potential issues
Offers comprehensive training and support
Has coverage in Mexico and partnerships with physical stores
These recommendations can help your business succeed. Take the opportunity to choose a gateway that provides security, ease of use, and supports the continued growth of your business.
